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Why is forex trading often said to be high risk? |
I am always reading how wild the forex market is and how most trading forex never profit and stop trading forex. I am looking at various charts for usd to yen or usd to euro for instance and it doesn't look all that volatile compared to many small cap stocks.. am i missing something? When a currency dips it usually looks to be around a %5 - %10 draw back, I wouldn't call that very high risk. Do most people trade forex with margin accounts? From my understanding w/ trading stocks - margin can allow you to double your return or loss, is there typically more leverage allowed for forex traders? depends on the amount of leverage you use, forex you can lose your entire amount if you havent a clue on what your doing in the blink of a eye , takes a good 3 - 6 months practice before anyone should attempt trading forex The point here is that the high leverage and low margin associated with Forex can result in significant losses due to price changes in Foreign Exchange Contracts and Cross Currency Contracts. The amount of initial margin may be small relative to the value of the foreign currency so that transactions are 'leveraged' or 'geared'. A relatively small market movement may have a proportionately larger impact on the funds you have deposited or will have to deposit: this may work against you, whereby you incur a loss, or for you giving you profit. You can register to this site and get a Free Ebook for you to understand forex more. Great question. Many people who trade forex fail to succeed. Forex trading is similar to trading stocks, but the movements can be much larger hence loses can be much bigger as well. People think they can open a mini account with $250 and turn it into 100k in one month using 100-1 leverage, which just isn't true. The reality is, Forex is a very tough market to trade. |
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Forex...stands for foreign exchange..you are talking currencies. You must do a course...you will lose money..can you handle that? All traders lose at some time..can you handle having a string... I need to caution you that participating in the Forex market is not as simple as finding free sources of information and free services that would tell you what to buy and when. There is plenty o... Definitely interest rates (plus other things) affect foreign exchange levels. The thing is you need to look at both countries interest rates. If you're trading US Dollar vs Canadian Dollar, ... Try checking ... Typically, what happens is you will be given the difference between the strike price and the current market price, as clearly the Writer of the Option cannot physically deliver a curreny pair at an... I certainly think you got the right idea regardless of whatever market you invest in. I too believe that the best we can do is to try out best to determine which way the major trend is and go with ... I haven't heard of major problems from them yet. I have been trading forex for about a year now, I have had my ups and downs, but I like it better than investing with stocks or options. What r... If you want to start trading on the Forex then you have to know exacetly what you are doing. Because it can be a dangerous game if you haven't got enough skills. Althoug there are other ways... |
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